Market Introduction

The global sustainable chemicals market was valued at USD 133 billion in 2024 and grew at a CAGR of 10% from 2025 to 2034. The market is expected to reach USD 344.96 billion by 2034. The growing emphasis on sustainability will drive the growth of the global sustainable chemicals market.

Green chemicals, environmentally friendly chemicals or sustainable chemicals, describe chemical substances which are designed, manufactured and utilized in a manner that limits adverse effects to human health and the environment during the life cycle of the chemical. The chemicals play a core role in the wider campaign of green chemistry that looks to minimize or abolish the use of dangerous materials in industrial procedures and consumer goods. Compared to traditional chemicals, which could be based on toxic feedstocks, have low energy intensities and produce byproducts that could cause significant harm to the environment, sustainable chemicals use renewable raw materials, energy efficient chemical synthesis, and produce low to no waste. Sustainable chemicals have been defined to have numerous aspects such as biodegradability, toxicity, energy consumption/production, resources efficiency and recyclability. They are frequently bio-based, i.e. of renewable biological origin, such as plants, algae, or microorganisms, rather than fossil fuels. Also, they could be produced with the employment of green technologies that decrease greenhouse gas emissions, water usage, and harmful reagents. Sustainable chemicals are also gaining importance in industries belonging to different sectors like agriculture, pharmaceuticals, personal care, textiles, and construction to meet tough environmental standards, minimize carbon footprints, and address the needs of eco-sensitive consumers. In addition, circular economy ambitions and corporates sustainability targets are spurring innovation in biodegradable solvents, bio-surfactants, green polymers and non-toxic dyes and coatings.

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Recent Development

• Neste and PCS Pte. Ltd. ("PCS"), a Singapore-based vital chemicals company, have partnered to deliver sustainable solutions to the chemicals sector in Southeast Asia.  In the region's value chains for chemicals and plastics, the partnership seeks to replace fossil fuels with renewable raw materials.  Neste will provide PCS with Neste RETM, a renewable resource used in the manufacturing of polymers and chemicals.  Neste RE will replace fossil raw materials used in PCS facilities on Jurong Island in Singapore with renewable wastes, such as leftovers from the production of vegetable oils or used cooking oil.

Market Dynamics

Drivers

The increasing emphasis on sustainability and environmental conservation – The increase in prominence of corporate sustainability goals is one of the most important drivers. The use of Environmental, Social, and Governance (ESG) frameworks and climate action plans are becoming popular, which is challenging the companies to shift to using sustainable chemicals rather than traditional ones. Not only is this change morally correct, but it also improves brand image and investor attractiveness. Sustainable chemicals can have increased initial cost associated with them; however, it can pay off in the long run through decreased operational costs like less energy usage, less waste, less money spent on regulation compliance. Innovation also has a very important role. Companies are also working hard to come up with new eco-friendly products that respond to the growing consumer needs of green and non-toxic products. These inventions provide an added advantage in the local and the global marketplace. Companies can reduce their liability to health and environmental hazards of dangerous chemicals through incorporation of sustainable chemicals thereby preventing regulatory penalties, product recall, or even reputational loss. Furthermore, a lot of organizations are moving towards the models of a circular economy, where the main focus is efficiency of resources, recyclability, and minimization of waste. In this regard, the sustainable chemicals would provide a feasible means of realizing closed-loop systems.

• DOMO Chemicals, a top supplier of sustainable polyamide solutions, and Siemens Smart Infrastructure celebrated a major milestone in their collaborative endeavour to advance sustainable practices in the electrical sector.  A new, high-performance TECHNYL 4EARTH polyamide 6 (PA6) material with enhanced flame-retardant technology and recycled content has been successfully developed and certified by DOMO Chemicals for use in Siemens applications.

Restraints

Significant upfront capital investments – Among the greatest obstacles, the high upfront price of switching to sustainable chemicals hampers the global sustainable chemicals market’s growth. These are associated with a high cost of raw materials, investment in R&D and redesigning of current processes. Such initial costs are sometimes regarded as financially straining, particularly to many companies especially the small and medium enterprises (SMEs), where the long-term advantages are overridden. Also, a lack of technical know-how and internal capacities to innovate or adopt sustainable chemistry exists. Most organizations do not have skilled human resource or specialized units to handle the intrigues of green transitions. Another big obstacle is resistance to change. The companies which have been using conventional chemical procedures over the decades are understandably hesitant to make any changes to their workflow in fear of affecting productivity or quality. The resistance is enhanced by the uncertainty regarding the performance of sustainable chemicals. The doubt of whether the green option can be as functional, long-lasting, or efficient as the conventional one, particularly on an industrial level, is usually the thing that postpones the introduction of sustainable chemicals.

Opportunities

Supportive regulatory environment – Among the most powerful impetuses is the introduction of stringent environmental standards among the leading economies. Regulations like the European REACH, the United States Toxic Substances Control Act (TSCA) and other local restrictions on hazardous chemicals are forcing industries to turn to greener alternatives of chemicals. The policies seek to reduce pollution, improve the health of the people and make industries safer. In addition to the regulation, the shift in consumer preferences is taking a central role. The current consumers are greener and are insisting on products that are non-toxic, biodegradable and ethically made and this directly drives the companies towards the use of sustainable chemicals in manufacturing. The market is also shaping due to government incentives and funding support. Tax breaks, subsidies and grants to develop and implement green technologies, such as sustainable chemicals, are being provided by many countries. This financial assistance makes it easier to implement greener solutions by businesses particularly small and medium enterprises. Moreover, the global climate initiatives like the Paris Agreement are driving the industries towards decarbonization, and sustainable chemicals can play an important role in that process by lowering the lifecycle emissions and environmental footprint.

Segment Analysis

Regional segmentation analysis

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Europe emerged as the most significant global sustainable chemicals market, with a 35% market revenue share in 2024.

Europe is currently holding a leading position in the worldwide sustainable chemicals market mostly because of its well-developed progressive regulatory system and policy support, as well as early implementation of green technologies. European Union has been leading in the world in coming up with strict environmental laws which promote the creation and utilization of more sustainable chemicals. It is important to note that the EU has presented tremendous goals on carbon reduction and implementing circular economy practices through its REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation and the European Green Deal. With such policies, there will be great urge among the industries to shift the use of conventional chemical substances to bio-based and eco-friendly chemicals. Furthermore, Europe boasts a well-developed chemical production ecosystem, placing a heavy focus on innovation and sustainability. The area is also well endowed with established biomass supply chain, and a friendly network of academic institutions, research centres and industry partnerships that help expedite the commercialization of sustainable solutions.

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• Axon Partners Group led a €3 million fundraising round for Catalyxx, a firm based in Seville that specialises in turning bioethanol into sustainable chemical products. The funding will be used to expand the company's facilities, which will produce sustainable aviation fuels (SAF) and renewable chemicals. The operation is a component of the Axon Desarrollo Andalucía fund, which is handled by Axon with assistance from the Andalusian Regional Government and the European Investment Bank (EIB).

Product type Segment Analysis

The product type segment is divided into bio-alcohols, bio-organic acids, bio-ketones, biopolymers, platform chemicals, specialty chemicals and green solvents. The bio-alcohols segment dominated the market, with a market share of around 33% in 2024. Bio-alcohols, led by bioethanol, are the most important sustainable chemicals in the global market because of their wide range of applications, established production platform, and compatibility with international sustainability agenda. Bioethanol is obtained mainly via renewable biomass (e.g. corn, sugarcane, cellulosic feedstocks), and is commonly utilized as a biofuel (particularly in the transport industry) as a cleaner fuel than petroleum-derived products. This has been done through establishing mandatory blending mandates (e.g. E10 or E15) in many countries, wherein a specific proportion of ethanol is required to be blended with gasoline, effectively creating a large increase in demand. They have high environmental benefits compared to the traditional petrochemical counterparts because of their renewable nature, biodegradability and reduced toxicity. In addition to this, bio-alcohols are comparatively simpler to incorporate into existent fuel infrastructure in addition to industrial procedures, which further boosts their commercial attractiveness and minimizes the obstacle to adoption. This leadership of the bio-alcohols is also backed by robust policy environments globally.

• Plug Power and Australia's Allied Green Ammonia (AGA) are considering deploying 2GW of electrolysers in Uzbekistan at a proposed $5.5 billion green chemicals factory.  The next sustainable aviation fuel (SAF), green urea, and green diesel project, supported by the Uzbek government, has already chosen the US company's electrolysers.  According to AGA, the plant uses 4GW of renewable energy and 6,000 tonnes of biomass per day to achieve an annual output of about 800,000 tonnes of urea, 350,000 tons of SAF, and 35,000 tons of diesel. Following an agreement in which the business will deliver 3GW of the hydrogen production technology to AGA's green hydrogen and ammonia plant in Australia's Northern Territory, Plug electrolysers were chosen.

Feedstock type Segment Analysis

The feedstock type segment is divided into biomass, agricultural waste, algae, forestry residues and animal waste. The biomass segment dominated the market, with a market share of around 36% in 2024. The most prevalent feedstock in the sustainable chemicals market is biomass, this is because of its availability, renewability, and applicability in numerous chemical production routes. Biomass is low-carbon and biodegradable, and unlike fossil-based raw materials, it can be produced again and again using organic feedstocks. Biomass also has the existing infrastructure in many countries to collect, process, and transport, making it cheaper and easier to scale than other emerging feedstocks such as algae or synthetic biology platforms. Government policies, subsidies and renewable energy targets also strongly favour biomass-based production, in particular in the EU, U.S., Brazil and India. Its carbon-neutral image, with sustainable management, also suits global climate ambitions. All in all, biomass flexibility, availability of supply, and compatibility of policy make it the most repeatedly used and economically attractive feedstock in the sustainable chemicals market.

• Acies Bio, a pioneer in microbial biotechnology, and LG Chem, one of the top chemical manufacturers in the world, announced a strategic partnership to work together to provide sustainable solutions for commercial biomanufacturing.  The focus of this project is Acies Bio's OneCarbonBioTM platform, a cutting-edge synthetic biology platform made to upcycle one-carbon feedstocks from recycled or renewable sources, like biogas, plastic waste, and captured CO₂ emissions, into a range of chemical intermediates, including valuable speciality materials. Through this partnership, LG Chem's vast skills in commercial process development, large-scale manufacturing, and international market access are combined with Acies Bio's proficiency in microbial production strain engineering, synthetic biology, and biomanufacturing development.

Application Segment Analysis

The application segment is divided into packaging, agriculture, food & beverages, personal care & cosmetics, textiles, pharmaceuticals, construction and automotive. The packaging segment dominated the market, with a market share of around 32% in 2024. Single-use plastics, mainly used in the packaging of food, beverages, and consumer goods industries, are among the greatest contributors to plastic pollution around the world. Consequently, this has changed a lot as regards to the employment of sustainable chemicals in bioplastics, compostable films, bio-based adhesives, and coating in packaging applications. The increasing prohibition of single-use plastics in countries and regions is one of the major elements that make packaging dominance. The EU, India and a number of states in the U.S. have implemented or proposed rules and regulations to gradually ban conventional plastics, which provides a great impetus to plastic manufacturers to switch to using biodegradable or recyclable material that uses sustainable chemicals. Also, the growing consumer understanding of packaging waste and its consequences on the environment has connected with the heightened necessity of green-labelled and responsibly packaged commodities, pushing brands to redesign their packaging with bio-based content. It has also become technically possible to develop flexible, rigid and semi-rigid packaging solutions, which can equal the performance of the conventional materials. Large corporations in the FMCG are spending on sustainable packaging developments, to achieve ESG targets, and decrease carbon footprints.

• Nuol Green Chemistry, a biochemical company dedicated to substituting sustainable and renewable products for petrochemicals, has leased the fermentation-based bio-acetone and bio-butanol plant in Little Falls, Minnesota, from International Process Plants (IPP), a pioneer in the repurposing of industrial manufacturing sites.  Nuol Green Chemistry's sophisticated bio-based chemicals, such as acetone and isobutanol, will be produced in large quantities at the precision fermentation plant, which has a capacity of 40 million gallons annually.  The plant provides strong infrastructure for bio-based industrial production and is ideally situated in Minnesota's bio-focused economy, close to major highways and a rail line.

Some of the Key Market Players

• Arkema S.A.
• BASF SE
• Braskem S.A.
• Cargill, Incorporated
• Corbion N.V.
• DSM-Firmenich AG
• DuPont de Nemours, Inc.
• Evonik Industries AG
• Mitsubishi Chemical Group Corporation
• NatureWorks LLC
• Novozymes A/S
• Plantic Technologies Limited

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